Description

Repeated project delays and cost overruns in Government contracts have turned the spotlight onto core issues of supplier selection, supplier integrity and supplier competence. Increasingly, Government agencies will test for a supplier’s capability to define and meet their contracted commitments – and this will include the need to demonstrate a robust commercial assurance and contract management process. For suppliers, this represents an opportunity to pro-actively demonstrate capability. This session will discuss the steps your organization could take to establish competitive advantage.
After years of practice and experience, the IACCM has brought together best practices in government contracting from around the globe. Paired with the former procurement officer of the U.S. Department of Homeland Security, this session will combine what best practices can be applied toward contracting with DHS and the Defense Department.

Acquisition vs. Procurement/Contracting DHS Acquisition Line of Business Directive • acquisition: The conceptualization, initiation, design, development, test, contracting, production, deployment, logistics support, modification, and disposal of systems, supplies, or services (including construction) to satisfy DHS needs. Acquisitions result from investment decisions, respond to approved requirements, align to strategic direction, and are guided by approved baselines. Acquisition does not include establishment of agency needs (requirements determination) or financial management. • Contracting: For the purposes of this Directive “Contracting” means purchasing, renting, leasing, or otherwise obtaining supplies or services. Contracting includes description (but not determination) of supplies and services required, selection and solicitation of sources, preparation and award of contracts, and all phases of contract administration. It does not include making grants or cooperative agreements. For the purposes of this Directive, “Contracting” is synonymous with “Procurement”. 6

Contracting Officer Authority and Responsibility (continued) • Ensure that: • All requirements of law and regulation are met before award of contract • Sufficient funds are available for obligation • Contractors receive impartial, fair, and equitable treatment • Buy-in losses not recovered during contract performance • Designate Contracting Officer’s Representative (COR/COTR) • Limits: • Contracting officers may bind the Government only to the extent of the authority delegated to them • Certain decisions require approval above level of contracting officer 10

Contracting Officer’s Representative (COR) • Assists in the technical monitoring or administration of a contract • Primary point of contact with contractor during contract performance • Specific authorities and responsibilities identified in contract provision • Not authorized to make any commitments or changes that affect price, quality, quantity, delivery, or other terms and conditions of the contract 11

Factors that May Impact Success Program Manager • Decisions outside the PM’s scope of authority • Which Requirement? • Conflicts between the PM and CO responsibilities 13

PM vs. CO Authority Integral Part of Internal Controls During contract performance, program offices are responsible for monitoring the performance of the contractor, providing technical assistance to the contractor that is required for contract performance, and notifying the contracting officer about any contract performance problems. Program offices are not authorized to change contract work, costs, or completion dates or to enforce [c]ontract provisions. Only contracting officers have the authority to do that. This concentration of authority in the contracting officer is an integral part of internal control within the contracting process. (From Civilian Agency Procurement: Improvements Needed in Contracting and Contract Administration,? GGD-89-109, at 25 (Sept. 1989); Verne Edwards article online) 14

3. Things to consider during the contracting process •What you should be doing •Evaluation Factors •Things to pay particular attention to/watch out for •Recommendations for proposal writing

Things You Should be Doing Before Contract Award • Before the procurement is initiated • Review DoD Source Selection Procedures at http://www.acq.osd.mil/dpap/policy/policyvault/USA00718310-DPAP.pdf • Courtesy calls on customer contracting and program personnel • Explore future/upcoming opportunities • Websites • Industry or Small Business Conferences • Before the RFP is released • Attend all pre-solicitation conferences and comment on draft RFPs – especially if they favor competitors 18

Things You Should be Doing Before Contract Award (cont’d) • Anytime you can • Find out about the incumbent, including Government assessment of its performance • Before proposal due date or other date specified • Review the solicitation in detail • Challenge provisions that either unduly inhibit competition or favor one source over others • Request a change to any provision you can’t live with • Decide whether or not to bid as prime or sub • Decide whether to bid at all • Avoid submitting a proposal for a contract you don’t expect to be able to perform successfully 19

Low Price Technically Acceptable (LPTA) Source Selections • Appropriate when best value is expected to result from selection of the technically acceptable proposal with the lowest evaluated price • Key Rules: • The evaluation factors and significant subfactors that establish the requirements of acceptability shall be set forth in the solicitation. • Past performance need not be an evaluation factor (but often is) • Tradeoffs are not permitted • Proposals are evaluated for acceptability but not ranked using the non-cost/price factors • Exchanges may occur 22

Fair and Reasonable Price Determination • In competitive acquisitions, a ―fair and reasonable‖ price is usually based on the existence of adequate price competition • In sole-source acquisitions, a ―fair and reasonable‖ price is usually based on detailed cost and price analysis. 25

Adequate Price Competition • Two or more responsible offerors, competing independently, submit priced offers that satisfy the Government’s expressed requirement and • Award will be made to the offeror whose proposal represents the best value where price is a substantial factor in source selection; and • There is no finding that the price of the otherwise successful offeror is unreasonable. • May exist even if only one offer received 26

Reasonableness vs. Realism FAR 15.404-1(d)(1) • Cost realism analysis is the process of independently reviewing and evaluating specific elements of each offeror’s proposed cost estimate to determine whether the estimated proposed cost elements are: • Realistic for the work to be performed • Reflect a clear understanding of the requirements • Consistent with the unique methods of performance and materials described in the offeror’s technical proposal 27

Responsibility FAR 9.104 • To be determined responsible, a prospective contractor must— • Have adequate financial resources • Have the other resources to be able to meet the requirement • Have a satisfactory performance record • Have a satisfactory record of integrity and business ethics • Be otherwise qualified and eligible to receive an award under applicable laws and regulations • Determination made by Contracting Officer 29

Recommendations for Proposal Writing 1. Read the RFP, especially sections L and M 2. Establish your win theme • Don’t just demonstrate that you can do the work, demonstrate why you can do it better than your competitors 3. Make it easy for the Government to find the information they're looking for • Separate section covering each factor and subfactor 4. Don't simply restate the RFP requirement, or that "we will meet all contract requirements" • Tell them how you will do that 30

Recommendations for Proposal Writing (continued) 5. Don't simply give them a textbook answer • • Tell them what you will do, but also Demonstrate that you have established methods and processes to successfully accomplish the work 6. Prove it • Demonstrate that your proposed methods and processes work 7. Use various methods of conveying the message, including call-out blocks, tables, charts, etc. 31

Recommendations for Proposal Writing (continued) 8. Identify why teammates were selected • What benefits (from the Government’s perspective) do they bring to the team? 9. Avoid taking any exception to a term or condition of the solicitation if at all possible • Assumptions can also be risky 32

Recommendations for Proposal Writing (continued) 10. Have your proposal drafts reviewed by panels that can ensure both compliance and content • Compliance: • Have you provided all information required by the RFP? • Is it easy for the evaluator to find information required by the RFP (especially, Section L proposal instructions)? • Is it easy for the evaluator to map the proposal to the RFP evaluation criteria (Section M). • Have people with source selection experience on panel • Content • How well did we understand the customer’s requirement? • How well did we demonstrate superior methods, processes, experience, etc? • Have people with detailed technical knowledge of the work scope on the panel. 33

When things go VERY wrong Public Scandals and their Aftermath • Procurement Integrity Act (41 U.S.C. § 423 and FAR 3.104) • One of several laws enacted following very public procurement scandals. It provides: • A ban on disclosing procurement information • A ban on obtaining procurement information • A requirement for procurement officers to report employment contacts by or with a competing contractor • A 1-year ban for certain personnel on accepting compensation from the contractor. 38

Vice President Gore’s Hammer Award National Partnership for Reinventing Government (formerly National Performance Review) 41 41

$436 - $600 Hammer CNET Article Steve Kelman (former OFPP Administrator)* • Never was a $600 Hammer • Bulk purchase of spare parts • Approved accounting method allowed allocation of R&D overhead costs to be applied to each item without regard to item cost • “The new moral is that numbers, taken as self-explanatory truths by the public and the press, can in fact be the woefully distorted products of a broken accounting system.” Other issues: • Hammer vs. Uni-directional impact generator • Special Tooling & Test Equipment *As reported in “Government Executive” 42

Improper Business Practices/Safeguards • General rule: Avoid even the appearance of a conflict of interest in Government-contractor relationships. • Gratuities offered to or solicited by Government personnel • Collusive Pricing (52.203-2 Certificate of Independent Pricing) • Unfair competitive advantage from current contract work 43

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